The answer. 1. There are generally two methods for stock valuation: absolute valuation method and relative valuation method. The calculation formula of relative valuation method is as follows: P/E ratio PE= share price/earnings per share, P/B ratio PB= share price/net capital per share, P/B ratio EV/ sales = market value/sales revenue * 100%, P/B ratio PCF= share price/cash flow per share. Absolute valuation method is mainly obtained through various cash flow models, and there is no definite formula.
Expand. 2. Stock valuation can be used to judge whether the stock in hand is overvalued or undervalued, so as to make a decision to sell or continue to hold it, and help investors lock in profits or firmly hold it to obtain higher returns; It can also help investors find stocks whose value is seriously underestimated, and buy stocks to make profits, which will directly bring economic benefits.